Short Sales – How to Manage the BPO
I’m not going to say that I am super strong. I’ve done some martial arts and some kickboxing, but if I hit you, I probably wouldn’t take you to the floor. Nevertheless, I know the best way to fight a bad Broker Price Opinion (BPO). I can knock that baby to the floor in three easy moves. And… here they are:
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- Meet the BPO agent at the property. In order to be able to intelligently discuss the BPO with the seller's lien holder, it is a good idea to assure that it has been completed, and that it was completed by a licensed agent. If you go to the property at the time of the appointment, you can verify that someone actually showed and that the individual who showed was not merely an assistant sent to take photos of the subject property.
- Prepare you own Comparative Market Analysis. Using your MLS, find at least 3 comparable properties that closed within the last three months. These properties need to support your purchase price. If they do not, you need to have ancillary materials that might explain the disparity in value (e.g., photos, repair bids).
- Order a property appraisal. When all else fails, you can always submit a full appraisal to the bank. Since the appraiser is certified, the short sale lender generally puts a lot of credence in the values noted on a full appraisal. Yes, appraisals cost money, and someone will have to pay for the appraisal, but often times, this is the best way to provide an accurate value to the short sale lender.
When the short sale lender counters your offer because the BPO came in higher, explore your options. If you feel strongly that the bank’s value is incorrect, you can knock that BPO to the floor with the three easy moves described above.
Photo: Todd Huffman